As a paper published in the academic journal Tsinghua Financial Review and online pointed out, the People`s Bank of China (PBoC), the central bank of China, is testing its own digital currency. It is done by the help of fake transactions between the bank and other commercial banks in the country.

China is not the only country that looks into digital currencies with plans to create its own in the future. The Bank of England, the Bank of Canada and Deutsche Bundesbank have also explored digital fiat currencies for some time now. However, cryptocoinnews.com speculated that China is ahead when it comes to such efforts.

“In a place like China, they may see an opportunity to catch up with other countries; to adopt new technology; and maybe even overtake people.”, as Simon Johnson, a professor at MIT’s Sloan School of Management, said in an interview.

It is expected that even if China introduces a digital currency, it will co-exist with paper currencies. The transition to a digital currency is a huge challenge from logistics` perspective.

Still, China is being described as an innovator in the area of transaction management.

“There’s a lot of innovation in the private sector with things like Alipay. And China is also the biggest user of Bitcoin, as far as we can determine.”, as the expert added as quoted by cryptocoinnews.com.

As reported earlier, the People`s Bank of China (PBoC) has expressed an interest in developing its own digital currency since the beginning of 2014, when the bank gathered a specialist team to research the subject, as cryptocoinnews.com wrote.